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Companhia Siderúrgica Nacional (SID)
NYSE:SID

Companhia Siderúrgica Nacional (SID) AI Stock Analysis

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Companhia Siderúrgica Nacional

(NYSE:SID)

55Neutral
Companhia Siderúrgica Nacional's stock score reflects significant financial challenges, including declining revenues, profitability issues, and increased leverage. While operational performance showed improvement, particularly in the mining and cement segments, ongoing financial pressures and negative cash flow weigh heavily. The high dividend yield provides some appeal, but the negative P/E ratio highlights the risks. Technical indicators show mixed signals, contributing to a cautious outlook.

Companhia Siderúrgica Nacional (SID) vs. S&P 500 (SPY)

Companhia Siderúrgica Nacional Business Overview & Revenue Model

Company DescriptionCompanhia Siderúrgica Nacional operates as an integrated steel producer in Brazil and Latin America. It operates in five segments: Steel, Mining, Logistics, Energy, and Cement. The company offers flat steel products, such as high, medium, low carbon, micro-alloyed, ultra-low-carbon, and interstitial free slabs; hot-rolled products, including heavy and light-gauge hot-rolled coils and sheets; cold-rolled products comprising cold-rolled coils and sheets; galvanized products; tin mill products that consist of flat-rolled low-carbon steel coils or sheets; and profiles, channels, UPE sections, and steel sleepers for the distribution, packaging, automotive, home appliance, and construction industries. It primarily explores for iron ore reserves at Casa de Pedra and Engenho mines located in the city of Congonhas; and limestone and dolomite at the Bocaina mine located in the city of Arcos in the state of Minas Gerais, Brazil, as well as produces tin. In addition, the company operates railway and port facilities; produces and sells cement to construction material stores, home centers, concrete producers, construction companies, mortar industries, and cement artifact producers; and generates electric power from its thermoelectric co-generation and hydroelectric power plants. It also exports its products. The company was incorporated in 1941 and is headquartered in São Paulo, Brazil. Companhia Siderúrgica Nacional operates as a subsidiary of Vicunha Aços S.A.
How the Company Makes MoneyCompanhia Siderúrgica Nacional (SID) generates revenue through a diversified business model. The primary revenue stream comes from the production and sale of steel products, which are sold both domestically and internationally. The company also benefits significantly from its mining operations, as it extracts and sells iron ore, which is a critical raw material for steel production and is also sold to third parties. Additionally, CSN has a cement division that produces and sells cement products, leveraging by-products from its steel and mining operations. The company's logistics segment provides transportation and port services, further contributing to its revenue. CSN's energy segment supports its operations and offers potential cost savings and additional revenue streams through the sale of surplus energy. Strategic partnerships and joint ventures in various sectors also play a role in enhancing CSN's market presence and profitability.

Companhia Siderúrgica Nacional Financial Statement Overview

Summary
Companhia Siderúrgica Nacional faces significant financial challenges, with declining revenues and profitability, increased leverage, and unstable cash flows. While the company maintains a strong asset base, its reliance on debt financing and negative net income are concerns. The steel industry's volatility further exacerbates these financial pressures.
Income Statement
65
Positive
The company experienced a revenue decline in the most recent year, with revenue decreasing from 45.44 billion to 43.69 billion. Net income turned negative, indicating profitability issues. However, gross profit margin remains relatively stable at around 35%. The decline in EBIT and EBITDA margins also points to decreasing operational efficiency.
Balance Sheet
55
Neutral
The debt-to-equity ratio increased significantly, indicating higher leverage and potential risk. Stockholders' equity decreased, reflecting financial instability. The equity ratio is low at around 11.8%, signaling a heavy reliance on debt financing. However, the company maintains a substantial asset base.
Cash Flow
45
Neutral
Operating cash flow was zero in the most recent year, suggesting potential liquidity issues. Free cash flow has been erratic, with periods of negative and zero growth. The lack of consistent cash flow generation indicates challenges in maintaining financial health.
Breakdown
Dec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
43.69B45.44B44.36B47.91B30.06B
Gross Profit
15.31B11.30B13.31B22.07B10.94B
EBIT
4.27B5.19B7.40B18.50B7.53B
EBITDA
7.28B8.58B10.07B23.08B9.69B
Net Income Common Stockholders
-1.54B-318.21M2.17B12.26B3.79B
Balance SheetCash, Cash Equivalents and Short-Term Investments
24.22B17.59B13.45B19.30B13.73B
Total Assets
103.91B91.53B85.35B79.38B63.00B
Total Debt
57.75B45.59B41.61B33.12B35.80B
Net Debt
34.44B29.55B29.62B16.47B25.86B
Total Liabilities
88.45B71.84B63.54B56.00B51.75B
Stockholders Equity
12.27B17.50B19.49B20.31B9.91B
Cash FlowFree Cash Flow
0.002.88B-3.33B13.57B7.89B
Operating Cash Flow
0.007.29B2.04B16.43B9.58B
Investing Cash Flow
0.00-4.59B-11.45B447.93M-1.86B
Financing Cash Flow
0.001.32B4.75B-8.53B1.19B

Companhia Siderúrgica Nacional Technical Analysis

Technical Analysis Sentiment
Positive
Last Price1.70
Price Trends
50DMA
1.59
Positive
100DMA
1.56
Positive
200DMA
1.79
Negative
Market Momentum
MACD
0.03
Negative
RSI
59.04
Neutral
STOCH
77.78
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SID, the sentiment is Positive. The current price of 1.7 is above the 20-day moving average (MA) of 1.55, above the 50-day MA of 1.59, and below the 200-day MA of 1.79, indicating a neutral trend. The MACD of 0.03 indicates Negative momentum. The RSI at 59.04 is Neutral, neither overbought nor oversold. The STOCH value of 77.78 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SID.

Companhia Siderúrgica Nacional Risk Analysis

Companhia Siderúrgica Nacional disclosed 41 risk factors in its most recent earnings report. Companhia Siderúrgica Nacional reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

Companhia Siderúrgica Nacional Peers Comparison

Overall Rating
UnderperformOutperform
Sector (49)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
SISIM
80
Outperform
$4.52B7.1121.66%-20.47%109.44%
GGGGB
67
Neutral
$5.27B9.135.86%5.29%-9.33%-51.03%
CMCMC
65
Neutral
$5.12B75.321.78%1.62%-7.93%-89.29%
TXTX
60
Neutral
$5.73B73.52-0.44%10.74%0.81%-108.00%
SISID
55
Neutral
$2.16B-17.19%12.47%-10.94%-756.50%
49
Neutral
$1.93B-1.47-21.02%3.74%0.80%-29.57%
CLCLF
41
Neutral
$4.18B-10.36%-12.78%-301.57%
* Basic Materials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
SID
Companhia Siderúrgica Nacional
1.70
-0.87
-33.85%
CLF
Cleveland-Cliffs
8.88
-8.72
-49.55%
CMC
Commercial Metals Company
45.35
-9.77
-17.72%
GGB
Gerdau SA
2.59
-1.06
-29.04%
SIM
Grupo Simec SA De CV
27.93
-3.07
-9.90%
TX
Ternium SA
30.14
-9.09
-23.17%

Companhia Siderúrgica Nacional Earnings Call Summary

Earnings Call Date:Mar 12, 2025
(Q4-2024)
|
% Change Since: 16.44%|
Next Earnings Date:May 08, 2025
Earnings Call Sentiment Positive
The earnings call highlighted strong performances and record achievements in cash holdings, mining, steel, and cement segments, along with significant ESG advancements. However, the call also noted challenges such as the impact of exchange rates on debt, negative cash flow despite operational success, and the strategic decision to withhold dividend distribution. Additionally, there are concerns about market dynamics in the steel sector, particularly related to imports and protectionist measures.
Q4-2024 Updates
Positive Updates
Record Cash Holdings
CSN achieved the highest cash holdings in its history, almost reaching BRL 25 billion, enabling better control over the company's leveraging.
Strong Mining Segment Performance
The mining segment confirmed operational excellence, achieving production guidance despite adverse weather, and experienced a 35% price increase leading to an EBITDA margin above 50%.
Steel Segment Recovery
The steel segment saw a 10% increase in sales compared to the previous year, with EBITDA margins reaching 11% for the first time in the year, indicating a recovery trend.
Cement Segment Record Margins
CSN Cement achieved a record EBITDA margin of 33%, the highest since acquiring Lafarge Holcim, outperforming market averages.
ESG Achievements
CSN reported no fatalities, a 63% reduction in lost days, and a 7% reduction in CO2 emissions in the steel mill, bringing them closer to their 2030 goals.
Negative Updates
Exchange Rate Impact on Debt
The leverage increased due to exchange rate variations on dollar-denominated debt, impacting the financial results despite operational improvements.
Negative Cash Flow Despite Strong Operations
Despite strong operational results, CSN experienced a negative cash flow due to financial expenses affected by exchange rate effects and high investment volumes.
Decision to Not Distribute Dividends
CSN decided not to distribute dividends in the first quarter of 2025 to focus on deleveraging, as approved by the Board.
Anticipated Challenges in Steel Market
Concerns were raised about the impact of protectionist measures and unloyal competition from imports, particularly from China, affecting the steel market.
Company Guidance
In the call, CSN reported strong performance for the fourth quarter and full year 2024, highlighting significant metrics such as achieving the highest cash in its history at nearly BRL25 billion. The company emphasized its operational excellence in mining, evidenced by a 35% price increase and an EBITDA margin over 50%. In steel, CSN saw a 10% increase in sales compared to the same period last year, leading to an EBITDA margin of 11% in the fourth quarter. The cement segment reached a record EBITDA margin of 33%, the highest since acquiring Lafarge Holcim. CSN also detailed its commitment to deleveraging, with a semester-end leverage ratio impacted by exchange rate variations but operationally closer to 3.2 times. The company's strategy includes capital recycling and a focus on organic growth, postponing dividend distributions to prioritize deleveraging. CSN's guidance for 2025 includes continued operational improvements and strategic investments to foster growth and maintain financial health.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.